July 2, 2010 | Dave Brown | Leave a comment As you are doubtless aware, HMRC don’t normally appear generous with their approach to taxpayers, and although what follows appears to be in the realms of generosity, it did not arise as a result of an unexpected burst of largesse on their part. For many years there has been a “DIY Housebuilders Scheme” in existence, within the VAT system, which was originally put in place so that DIY Housebuilders were not put at a disadvantage against individuals who had a new house built by a developer. In short, an individual would simply retain all the invoices for building materials, bundle them up and send them with a claim for the VAT incurred. HMRC would then repay that VAT subject, of course, to making reasonable checks on the legitimacy of the documents received. If, however, an individual decided to build himself a new house which had an occupancy restriction on it – such that it would only be used for holiday purposes, HMRC would not entertain a claim, on the basis that if a developer sold such a property to an individual, it would be liable to VAT. HMRC have now been forced to admit that this policy was incorrect, by virtue of a case that has recently been decided at what used to be called the VAT Tribunal [now, the First Tier Tribunal]. They now accept that holiday homes qualify, as long as the property is to be used by the claimant, and not let out. They have also accepted that this will also apply to situations where a non-residential building is converted into the holiday home. And finally, HMRC are also inviting anyone who has been in the position of having a claim refused, to submit one now. This will apply retrospectively as well, to anyone who has completed such a property within the past four years and three months.